Whats the rush?Usually you do it because some stockboker is...

Whats the rush?

Usually you do it because some stockboker is demanding it be done so he can then take a placement at a discount to the new price, post recon.

Well that wont be happening here. Adequate funds have been lined up without any assistence from brokers.

Come May 2009 they will receive the balance of the option conversions worth about $7M.

Why then would you aggravate your shareholders unless you had no choice (i.e. the hypothetical broker who wont do a raising unless a recon happens)?

Nope, once you elimate brokers from the equation, there is no rush and thats the impression I got when I raised it with the company. They were interested in the value of the asset much more than how many shares are on issue.

Its interesting how many punters will buy an exploration stock with nothing but moose pasture and feel comfortable with a tight share register but not feel comfortable buying a company which has a real world class asset and which has a value which dwarfs its market cap, because it has too many shares on issue.

Lets look at RCH.

50% of the 1 billion shares and 1 billion options are held or will be held by a single corporate entity in for the very long hall. A big chunk of the remaining shares are held by Asians punters who came with the company and need a fair size share appreciation to get their money back after getting torched in the company when it was in the IT game. Then there a big new group who are associates of the "M" brothers. Somehow in all this the new soon to become a big shareholder needs to get set. Combination of on market and placement is how I see that happening.

For a company with 1 billion shares and 1 billion options, there aren't that many free floating shares.

This week should determine whether we have a serious buyer in the market or if its another false start. 4.5 is my yardstick. If we get 5 days of good volume and it breaks and holds above 4.5 then it has started.

This time next week will be a time for reflection

The "M" brothers reckon this is worth $3.00 per share fully diluted (operating mine). As they are both former partners of Deloittes, I think its fair to say they can add up.

My calculations using other Mo companies feasibility models but going heavy on the capex (I use $750M capex for a 9MT p.a. plant) which is about $250M more than what the "M" brothers are using I think. I like to be very conservative with my numbers.

Anyway, I get $1.40 per share using a 10 year mine life which should prove too conservative. And yes thats fully diluted but I assume 50% of the project needs to be given away to a JV partner (I reckon a Japanese steel mill or Mitsui will step up).

This may seem incredible but so was FMG. You have to sit down and do the hard homework (numbers) yourself because nobody else is going to. Well thats not true as I did them for you and in fat have posted them on this site.

So what you are now going to want to know is what is it worth now, pre JORC?

I reckon 10 cents now is no big ask but that is my personal opinion. 10 cents now and if the good news keeps rolling out then we may see higher prices tested.

JORC you ask? It needs many holes redrilled at the correct angle in the correct direction. They need to do about 40 diamond holes using those man portable rigs (chopper them on to site).

Come September, we will be talking JORC resource I hope.

But lets not get hung up about JORC. The 36 diamond holes already drilled demonstrate high grades over big widths and only a small part of the main lease has been drilled.

For those that know jack sh_t about Molybdedum projects I'll tell you one thing to keep in mind. It aint normal to get 100Mt @ 0.12% Mo (adjusted for assay errors). There are only 3 other projects in the West that can match it or beat it out of all the pure Moly projects. Now the high core of 55Mt at 0.19%Mo is sensational ultra high grade stuff and almost nobody except the Climax mine (biggest and highest grade in the world) can match that.

What we have here in RCH is a very special project.

It was RIOs opinion that there is 200Mt @ 0.12%Mo but this may eventually be proven to be a understatement.

So when I said yesterday to sell all your crap holdings going nowhere and stick it in RCH, I'm pretty sure you will recover your losses.

Just hold, hold, hold.